Venezuela currency blues hit U.S. blue-chip companies

BOSTON, July 30 (Reuters) - Venezuela's currency woes cut
nearly $3 billion in profit at U.S. blue-chip companies during
the second quarter and prompted Procter & Gamble Co to
remove its operations in the South American country from its
consolidated financial reports.

More so-called deconsolidation moves and exits from
Venezuela are likely to happen during the second half of the
year as U.S. corporations grow increasingly frustrated with
Venezuela's sinking Bolivar currency, according to analysts and
U.S. regulatory filings.

Deconsolidating Venezuelan operations means that business
can largely no longer hurt or benefit a U.S. parent company's
financial results. Often companies are taking a big one-time
charge so that they can ring-fence what is left in Venezuela.

Colgate-Palmolive Co and Goodyear Tire & Rubber Co
, for example, said they also may deconsolidate their
Venezuela operations if economic conditions in that country
worsen, according to U.S. regulatory filings made this week.

And Mattel Inc said it may cease operations in
Venezuela altogether if volatility in Venezuela worsens.

With slumping crude oil prices and debt payments coming due
this year, the Venezuelan government has fewer U.S. dollar
reserves available to meet the private sector's demands. As a
result, entities may have a harder time obtaining U.S. dollars
than any time since currency controls were first implemented in
2003, Ernst & Young said in an April report.

Jack Ciesielski, president of investment research firm R.G.
Associates, said if conditions do not improve in Venezuela, he
expects to see more companies follow P&G's lead.